Reimbursement or Indemnity

If you have been paying attention to my weekly LTC Coffee Break broadcast schedule, you’ll have noticed this week that Michael Florio and I discussed the topic of reimbursement and indemnity policies.

(My shameless plug – in the time that it takes for you to finish a medium coffee from Dunkin, we will share you an idea designed to inspire, inform, and educate.  We release a new episode every Tuesday morning at 10am or you can view on demand on our LTC Coffee Break Channel.  Please join us. )

Anyway, we share similarities and differences between the two approaches.  In fact, here is a side-by-side comparison.  And, if you want a more formal review, you can view a recording of my webcast that aired yesterday.

Regardless of which claims paying methodology the policy follows, the client MUST qualify for benefits.  Remember, HIPAA guidelines apply where the health event occurs where the client is unable to perform 2 of the 6 activities of daily living or be cognitively impaired as diagnosed by their healthcare provider which includes a plan of care.

An indemnity policy pays benefits up to its monthly benefit cap without the client having to submit receipts.  It does not, however, reduce the involvement of the client’s family member or their Power of Attorney (POA) designee in the process.  In fact, have to manage the bills, the vendor and caregiver relationships, documentation, and checkbook.  And, if the family member is doing all of that as well as providing hands-on care … it could be overwhelming.

One misconception that is often shared about reimbursement plans is that the only way that claims are paid is by manually paying bills then submitting them to the insurer for reimbursement.  (Sounds a lot like the process that I mentioned above for the indemnity plan.)

In fact, bill administration is a free service that we at OneAmerica offer with all of our policies.  Cutting to the chase, care providers can direct bill OneAmerica without the insured’s family or POA having to do anything.  This provides both efficiency, accuracy, and offers more time for the family to spend time with their loved one rather than spending time caring for their loved one.

How claims are adjudicated may differ from one carrier to the next but we are all in the business of providing our client’s the financial resources when they need it.


Finally, another shameless reminder, join Michael and me for a Coffee Break.  We broadcast live every Tuesday at 10 am and have our recorded library open 24/7.


One other reminder. “The Great Retirement Income Gap” consumer webcast takes place every Tuesday evening at 7 pm (eastern) is running until August 25.  

Please, drop me an email at for more information about our virtual consumer seminar or to get a customized consumer seminar and campaign!

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